Pioneer Editorial: Coming to terms with the deficit
Americans got a glimpse Wednesday of the nation's financial future, and they didn't like what they saw. But it's a reality that we all need to face. Co-leaders of the deficit commission appointed by President Barack Obama floated a deficit-reduct...
Americans got a glimpse Wednesday of the nation's financial future, and they didn't like what they saw. But it's a reality that we all need to face.
Co-leaders of the deficit commission appointed by President Barack Obama floated a deficit-reduction plan that immediately drew detractors from all sectors. But with a nearly $14 trillion national deficit, drastic measures must be taken to curb it before its weight topples the U.S. economy even worse than the Great Recession.
Put forth by Democrat Erskine Bowles and Republican Alan Simpson, the plan calls for $3 in spending cuts for every $1 in new revenues, plus changes to Social Security and Medicare.
Not unlike the $6 billion state budget deficit the Minnesota Legislature will struggle with come January, Congress must struggle with turning around a deepening federal deficit before it inflicts serious permanent damage on the economy. It will mean pain all across the spectrum.
The plan is not yet final, the full 18-member deficit panel must make its recommendations by Dec. 1, and at least 14 members must be in agreement. But the Bowles-Simpson plan indicates what the panel will be discussing and of the severity of the solution needed as a solution.
It seems a well-rounded plan, designed to trim $4 trillion off the budget in 10 years, suggesting everything from a federal employee wage freeze to eliminating earmarks by lawmakers. It would cut both domestic and defense spending.
Social Security recommendations would be to raise the eligible age to 68 by 2050 and 69 by 2075, plus make formula changes that would reduce annual cost-of-living increases. Wealther recipients would receive smaller Social Security checks. It's a fact that we are living longer, and the age scale should be changed to reflect that. Plus, the plan originally meant as a safety net should not be there in full force for those who are wealthy.
Also in the deficit-cutting plan is a 15-cent gasoline gas tax hike, tax bracket changes, and cuts in payments to doctors and health care provides under Medicare.
None of the actions sound palatable, but the reality is some shape or form of them will need to be adapted if we are to turn the federal deficit around. Hopefully, the deficit commission will fine-tune the Bowles-Simpson plan and make some sound recommendations on Dec. 1.
Then it will be up to Congress to agree or disagree with them. But not agreeing with the recommendations puts Congress back at Square One, facing growing deficits with no solution in sight. We need a bipartisan solution that doesn't favor individuals according to their wealth or any special interests.
But judging from past practice, we fear the new Congress won't be up to the task.